There is no question about the dominance of Apple in the tablet market. With Google's Android lagging in second place, everyone else is in the minority. But a recent deal between Microsoft and Barnes & Noble might turn Windows 8 into a major contender in the tablet and e-reader market soon.
Microsoft Buys Into the Nook
Microsoft has reportedly made an investment of US$ 300 million into Barnes & Noble for a 17% stake in its e-reader business. But while Barnes & Noble had released its Nook e-reader and Nook Color tablet as capable Android devices, it has consistently been overshadowed by Amazon and its Kindle lineup, which are more popular among consumers. Amazon's main advantages are its huge e-book collection, as well as other content for grabs, including music, apps and even merchandise.
Microsoft, meanwhile, has big dreams for Windows 8, which is expected to run not only on desktop computers and notebooks, but also on portable, touch-screen devices such as tablets and even smartphones. But, with the market leaning toward Apple, is there a place for Windows in the tablet business?
Case in point: 97.3% of enterprise tablet users prefer the Apple iPad. As such, all devices in the iPad platform -- from the original iPad, to the iPad 2, to the "new" third-generation iPad -- far outpace other devices in this sector. Microsoft's Windows is the dominant platform for PCs and notebooks, but if Microsoft wants to remain relevant in a post-PC world, it will need to get a handhold on this market by all means.
Here's where the B&N deal comes in place. Microsoft has not exactly invested directly in the company, but in a subsidiary -- temporarily called "NewCo" -- which will handle the company's tablet business. Along with the deal, Microsoft and Barnes & Noble will settle patent infringement lawsuits for Android's alleged misuse of Microsoft technologies. It will be interesting to note that "NewCo," hasa market valuation twice that of its parent company, at US$ 1.7 billion.
Increased e-Book Distribution Points
B&N will design and create e-reader apps and interfaces for Windows 8, and Microsoft will help establish Nook as an e-book platform among hundreds of millions of Windows users.
The two companies are likewise targeting another potentially lucrative sector: the education market. Barnes & Noble CEO William J. Lynch highlighted the company's partnership with Microsoft as "important parts of our strategy to capitalize on the rapid growth of the Nook business, and to solidify our position as a leader in the exploding market for digital content in the consumer and education segments."
Both Apple and Amazon have already established footholds in the digital textbook market, and it only makes sense for the Microsoft-B&N partnership to make an attempt to become relevant in this field before other companies start dominating.
There is no official announcement yet on whether the Nook will be using Windows 8 in the future, but all roads lead there. The deal will effectively be Microsoft's jumping point for competing against established tablet platforms like iOS and Android. But more than just Windows 8 on the Nook tablet, Barnes & Noble says the deal will be beneficial to publishers, who will gain additional points of distribution among the hundreds of millions of Windows users. Lynch says at least six CEOs from major publishing houses have lauded the deal, and are "completely aligned with Barnes & Noble."